Lecture 03 PDF

ETAC – 3124 Production and Operations Technology Ms. Thushani Mallikarathne Lecturer (Probationary), Det. Of Mechanical & Manufacturing Technology, Faculty of Technology, Contact: thu...

ETAC – 3124 Production and Operations Technology Ms. Thushani Mallikarathne Lecturer (Probationary), Det. Of Mechanical & Manufacturing Technology, Faculty of Technology, Contact: [email protected] | 0712339770 Wayamba University of Sri Lanka  Product Design and Development  Products/Services available  Why are they available  Stages in development process  Customer needs satisfaction  Conducting survey 2 Products/Services that are available to use 3  Why do many varieties /brands serve the same purpose 1.Consumer demand and preferences  Diverse needs and tastes  Customization and personalization 4.Innovation and R&D 2.Technological advancements  Continuous Improvements  Innovations  Product life cycles  Automation and efficiency 5.Economic environment 3.Globalization  Regulations  Access to global markets  Economic conditions  Competition 4  Example – Smartphone Market Consumer Preferences – Different consumers prefer different features such as camera quality, battery life, or design Technological Advances – Continuous innovations in technology lead to new models with advanced features Global Competition – Companies compete globally, offering a range of products at different pricess to attract a wide customer base. 5  Activity 1 Select a product category, and identify different brands and models/types available. Explain why there are so many differences in this category 6  Stages in New Product Development Process To minimize the risk of new product failure, new product development follows a structured process, Stages in new product development are, 1. Idea Generation. 2. Idea Screening 3. Concept Development & Testing. 4. Marketing Strategy Development. 5. Business Analysis. 6. Product Development. 7. Market Testing. 8. Commercialization 7  Idea Generation How to Generate Ideas Why It’s Important  Customers: Market research, lead users The foundation of innovation and growth  Employees: Encouraging and rewarding ideas  Competition: Analyzing competitive products  Marketing Channels: Input from dealers, distributors  Senior Management: Innovative ideas from top executive Idea Screening Purpose To start with, ideas are sorted into  Promising ideas. Filter out unfeasible or low-potential ideas  Marginal ideas.  Rejects. A committee evaluates promising ideas. Surviving promising ideas are screened through a process. 8  Concept Development and Testing Components Purpose Refine attractive ideas into viable product concepts Product Idea: Potential offerings Product Concept: Elaborated idea in consumer terms Testing Product Image: Consumer perception Undergo on tastings to validate Marketing Strategy Development Purpose Create a roadmap to introduce the new product to the market After concept testing, for concepts that qualify a preliminary marketing strategy is created to introduce new products into the market. 9  Business Analysis Purpose Evaluate the financial feasibility and business attractiveness Product Development If a product concept passes the business analysis test, it is taken forward to the product development stage. - So far, the concept exists on paper. - In product development, the concept is provided in detail to R & D to make a physical product. - Stages in product development could be, o Prototype development. o Prototype Lab Testing. o Functional Testing. o Consumer Testing. Once management is satisfied with new product, functional/psychological performance, product is ready for market. 10  Market Testing At this stage, the new product is ready for Brand Name, Packaging. The objective of market testing could be to test products in an actual market setting. Learn about actual market size. Learn about how consumers/dealers handle, use, and purchase new products. Commercialization After successful market testing, new product moves to commercialization stage. - During this stage, production of new product on a commercial basis is rapidly built up. - New product is formally launched. For this, decision to be taken could be: o When to Launch: o Where to Launch: o To Whom: o How to Launch: 11  Example for New Product Development Process Protect Plus You own CCTV supplying company. You need to enhance your income by producing new products for society. But you know only technical operations. Requirement (Foundation) is there Idea? Idea Generation Customers Employees Competition Input from Dealers Senior Management Survey Encourage with reward Research Discussions Discussions Automated home Marketing campaign Products for low-cost New brands Increase promotion security system 12  Idea Promising Marginal Reject Ideas Ideas Automated home Smart home Idea security system security Screaming Marketing system Campaign Product for low cost New brans Increase promotion Concept The company creates a prototype of the smart home security system and tests Development and it with a focus group of potential customers. They gather feedback on the Testing design, usability, and features, and make necessary adjustments based on this feedback. 13  Developing the marketing strategy Step Details Example Identify the primary audience for the Urban homeowners aged 30-50 who Define the Target Market product value security and convenience "Advanced protection and peace of Describe the unique benefits and value Value Proposition mind with real-time alerts and HD the product offers video monitoring." Set clear, measurable financial Achieve $2 million in sales and a 15% Sales and Profit Goals objectives profit margin in the first year 14  Step Details Example Marketing Mix (4 Ps) Smart home security system with Product Define the product and its features motion detection, night vision, mobile app control Competitively priced at $299 with Price Set pricing strategy optional add-ons Digital marketing campaigns, Promotion Outline promotional activities influencer collaborations, limited-time discounts Available through electronics retailers, Place Determine distribution channels online platforms, and the company’s e- commerce site Use analytics to track performance Track progress and make necessary Monitoring and Adjusting and adjust the strategy based on data adjustments based on data and customer insights 15  The company conducts a thorough business analysis to estimate the Business Analysis production costs, forecast sales, and assess the potential profitability of the new security system. They also evaluate the risks involved, such as potential competition and market acceptance. The company finalizes the design of the security system and develops a fully Product functional prototype. This prototype undergoes rigorous testing to ensure it Development meets quality and performance standards. Any issues discovered during testing are addressed, and the design is refined accordingly. The company launches the security system in select cities to test its market Market Testing acceptance and gather customer feedback. They monitor sales, customer satisfaction, and any issues that arise. This data is used to refine the product and adjust the marketing strategy before a full-scale launch. The company ramps up production and distributes the security system to Commercialization major electronics retailers, online platforms, and their e-commerce site. They launch a comprehensive marketing campaign that includes digital marketing, influencer collaborations, and promotional discounts to drive awareness and sales. 16  Product Developing You have a product to develop. But how to implement it ? 17  Product Development Team Core Team Extended Team  Marketing professionals  Design professionals  Legal, sales, finance professionals Mechanical engineers  Consulting firms Electrical engineers  Government agencies Industrial engineers  Universities  Manufacturing  Environmental groups professionals  Professional regulatory groups Manufacturing engineer Purchasing specialist 18  Benefits of Integration 1. Improved Collaboration- Integration fosters better communication and collaboration between different teams or departments involved in product development, such as design, engineering, marketing, and manufacturing. 2. Efficiency and Cost Reduction- By integrating processes and data, inefficiencies are reduced, leading to lower costs and faster time-to-market for products. 3. Enhanced Product Quality- Integrated development allows for early identification and resolution of issues, resulting in higher quality products that better meet customer needs and expectations. 4. Innovation and Creativity- Integration can spur innovation by bringing together diverse perspectives and expertise, enabling the development of more creative and unique products. 5. Risk Mitigation- Integrated approaches help in identifying and mitigating risks throughout the development process, reducing the chances of costly errors or failures. 6. Adaptability and Scalability- Integrated systems are often more adaptable to changes in market demands or technological advancements, making it easier to scale products and processes as needed. 7. Customer Satisfaction- Ultimately, integrated development leads to products that are more aligned with customer requirements, enhancing overall satisfaction and loyalty. 19  Goals of Systematic Customer needs identification  Ensure that the product is focused on customer needs  Identify hidden needs as well as explicit (obvious) needs  Provide a fact base for justifying the product specification  Create an archival record of the needs activity of the development process  Ensure that no critical customer need is missed or forgotten  Develop a common understanding of customer needs among members of the development team Customer Needs Process  Gather raw data from customers  Interpret the raw data in terms of customer needs  Organize the needs into a hierarchy of primary, secondary, and (if necessary) tertiary needs  Establish the relative importance of the needs  Reflect on the results and the process 20  Questionnaire That Used to Get Ideas From Customers When Expanding CCTV Supplying Company 1. What features do you currently find most valuable in your CCTV systems? 2. Are there any specific challenges or issues you face with your current CCTV setup? 3. What additional features or functionalities would you like to see in a new CCTV system? 4. How important is ease of installation and user-friendliness in a CCTV system for you? 5. Would you prefer wired or wireless CCTV systems, and why? 6. What are your main concerns regarding CCTV system reliability and security? 7. How do you typically research and decide on purchasing new CCTV equipment? 8. Are there any specific brands or technologies you trust or prefer when it comes to CCTV systems? 9. Do you have any suggestions for improving customer service or support related to CCTV systems? 10.In your opinion, what could a CCTV supply company do to stand out from competitors? 21  Received feedback and Interpreted idea Question Customer Feedback Interpreted Idea Research and develop higher 1. What features do you currently find "I appreciate the high-resolution resolution CCTV models to meet most valuable in your CCTV systems? video quality." demand for clearer images. 2. Are there any specific challenges or Investigate and refine motion "I struggle with frequent false issues you face with your current detection algorithms to reduce false alarms." CCTV setup? alarms. 3. What additional features or Research and implement AI "I would love to have facial functionalities would you like to see technologies for facial recognition in recognition capabilities." in a new CCTV system? CCTV systems. 4. How important is ease of "Ease of installation is crucial; clearer Simplify installation guides and installation and user-friendliness in a instructions would help." provide user-friendly tutorials. CCTV system for you? Expand wireless CCTV product range 5. Would you prefer wired or wireless "I prefer wireless systems for flexibility to emphasize flexibility and ease of CCTV systems, and why? and easier installation." 22 installation. 6. What are your main concerns "I worry about system vulnerabilities Enhance cybersecurity measures to regarding CCTV system reliability and to hacking." protect against hacking threats. security? 7. How do you typically research and Improve online presence with "I rely heavily on online reviews and decide on purchasing new CCTV detailed product information and recommendations." equipment? customer reviews. 8. Are there any specific brands or Strengthen partnerships with reliable "I trust brands known for their technologies you trust or prefer brands and ensure consistent reliability." when it comes to CCTV systems? product quality. 9. Do you have any suggestions for "Quicker response times from Implement dedicated support teams improving customer service or customer support would be for faster response and resolution support related to CCTV systems? appreciated." times. 10. In your opinion, what could a Develop consultancy services for "Offer customized solutions tailored CCTV supply company do to stand personalized CCTV solutions based to specific needs." out from competitors? on customer requirements. 23  Activity 2 Select a product of your choice and develop a questionnaire to identify consumer needs Then answer your question list 24  Focus Groups  Generates group discussion  Can resolve conflicting views  More than just getting people together  Needs a skilled moderator  Requires planning, scheduling, and budget Documenting Interactions with customers  Audio recording  Notes  Video recording  Still photography 25  Concept testing process 1. Define the purpose of the concept testing 2. Choose a survey population and sample size 3. Choose a survey format 4. Communicate the concept 5. Measure customer response 6. Interpret the results 7. Reflect on the results and the process 26  1. Define the purpose  Which of the alternative concepts should be pursued  How can the concept be improved to better meet customer needs  Approximately how much units are likely to be sold  Should the development be continued 2. Define the sample size 1.Sample size varies from a few to thousands 2. Factors affecting the sample size ▪The stage of product development ▪Cost to conduct survey ▪Nature and intent of the survey ▪Budget (amount) of the development project ▪How possible to collect the intended information. 3. Possible to structure multiple surveys with different objectives at different stages. 27  3. Choose a survey format Formats ◦Face to face interaction ◦Telephone ◦Postal mail ◦Electronic mail ◦Internet (a test site on the internet) Each has its pros and cons Each has its bias. 4. Communicate the concept ◦Verbal description ◦Sketch ◦Photos and renderings ◦Storyboard (a series of images shown a temporal sequence of actions involving the products) ◦Video (allowing more dynamic than the story board) ◦Simulation ◦Interactive multimedia (video and simulation) ◦Physical appearance model (looks-like) ◦Working prototypes (works-like) 28  5. Measure customer response  Mere their preferences among alternative concepts  Understand why and how they respond to the product concepts  Attempt to measure purchase intent (the likelihood of buying)  But avoid aggressively promoting the product concepts 6. Interpret the results Q=NxAxP Where P = Cd x Fd + Cp x Fp Q = the quantity of the expected sales N = the number of potential customers expected to buy A = the fraction of these potential customers aware of the product and the product is available P = the probability that the product is purchased if the customer is aware of it and it is available. Fd = the fraction of survey respondents indicating that they would definitely purchase Cd = the percentage that those in Fd will actually buy (.1-.5) ◦ Cp = the percentage that those in Fp will actually buy (0-.25) 29  Activity 3 1. What is the expected quantity of sales if,  There are 10,000 potential customers.  60% of these customers are aware of the product and its availability.  20% of survey respondents indicated they would definitely purchase.  30% of survey respondents indicated they would probably purchase.  The percentage of those who would definitely purchase (Cd) is 0.4.  The percentage of those who would probably purchase (Cp) is 0.2. 2. How would the expected quantity of sales change if the number of potential customers increased to 15,000? 3. What is the expected sales quantitys if only 50% of the customers are aware of the product, but the probability of purchasing remains the same? 30 Thank You! 31